Sunday, March 8, 2009

Can Philanthropy be considered as part of Corporate Social Responsibility?

Following are excerpts from an interesting discussion I had on Linkedin.

Ashutosh Agrawal
MBA Student at IE (Instituto de Empresa) Business School, Madrid

Many companies, whose products do not directly benefit society, resort to philanthropy. Telephone companies giving away free telephones, companies giving away money to charities etc. What other means are available to them to highlight their social responsibility? Individuals do charities, so why not companies? Or they should just stick to making their operations (manufacturing, distribution, office buildings etc.) society & environment friendly?

Comments (4)

Liz Maw
Executive Director, Net Impact

I think so. Kellie McElhaney's book (Just Good Business) gives great examples of strategic and aligned Philanthropy, such as Whirlpool supporting Habitat for Humanity, and then donating appliances to the new houses. Kellie also talks about instances when philanthropy is not aligned or strategic, and questions whether that is the best idea. For example, she talks about Ford Motor Company supporting breast cancer, and suggests that they could focus instead on alternative energy / environment. (Note I may be getting this slightly wrong, but hopefully you get the gist of it!)

Ashutosh Agrawal
MBA Student at IE (Instituto de Empresa) Business School, Madrid

Thanks Liz. You brought out a good point that Philanthropy can be related to the area in which company is working. Then it makes sense..... But still Philanthropy in non-related areas (Ford example) can not be bad if the management feels passionate about the cause, or the cause is something important universally ( like AIDS, Cancer etc. ) I dont know... Its just my opinion.....

Josh Cleveland
Program Manager at Net Impact

I think you're right Ashutosh, that philanthropy is never going to be "bad" per se. I do think though, that some forms of it are unsustainable. I couldnt find any up to date stats but it would certainly seem that Ford would cut their breast cancer work in a downturn faster than Whirlpool. Why? because Whirlpool's philanthropy happens to be getting them into markets and building their brand in a way that Ford isn't. (Think of how the "Ford Tough" motto is strengthened by supporting breast cancer - doesnt seem that strategic.) That can be damaging to nonprofits that rely on those funds and then get left out in the cold eventually.

Ashutosh Agrawal
MBA Student at IE (Instituto de Empresa) Business School, Madrid

Thanks Josh for giving a new angle. U linked the sustainability effort with the organisation strategy. Then sustainability becomes a tool for branding and profits. I might be exaggerating but then for some companies, sustainability is a way to boost brand image or even customer base. I dont think that is bad since it is 'Win Win' situation and as u told, they will continue the efforts in downturn. But still it does not sound right..... Its the intention that matters. Maybe this downturn can be a litmus test for companies like Ford and others, as to whether they are really committed to sustainability?

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